What this guide covers
This page is your single reference for how to create invoices: what to include, how to stay compliant with tax recordkeeping, which payment terms to use, and how to get paid on time. We’ve included data tables for quick reference and links to our focused how-to guides so you can go deeper on any topic.
Whether you’re a freelancer, contractor, or small business, you’ll find everything you need—from invoicing basics to invoice format, sending invoices online, and invoice examples.
What is an invoice and who needs one?
An invoice is a document you send to a client or customer that states what you provided (goods or services), how much is owed, and when and how to pay. It creates a clear record of the transaction for both sides and is the basis for your books and, if needed, for the IRS.
Who should send invoices? Anyone who gets paid for work or goods outside of a regular W-2 job: freelancers, contractors, consultants, sole proprietors, and small businesses. If you send a bill or request payment, you’re invoicing. Understanding invoicing basics and when to use an invoice vs a receipt helps you stay organized and compliant.
Essential elements of an invoice
Every invoice should include enough detail to support your income for taxes and to avoid disputes. The IRS does not require a specific form, but your records must be accurate, consistent, and detailed. The table below summarizes what to include; for full layout and wording, see our invoice format and how to write an invoice guides.
| Element | What to include | Why it matters |
|---|---|---|
| Your identity | Business name (or legal name), address, contact info, and DBA if applicable | Identifies who is owed money and supports tax records |
| Client identity | Client/customer name and billing address | Shows who owes you and supports your books |
| Invoice number | Unique number (e.g., 1001, 1002) | Helps you and the client track and match payments |
| Date | Invoice date and optionally service/delivery date | Supports “when” for taxes and payment terms |
| Line items | Description, quantity, unit price, and amount per line | Substantiates the amount of income you report |
| Subtotal, tax, discounts | Subtotal, any tax (e.g., sales tax), shipping, discounts | Clear breakdown of how the total is calculated |
| Total due | Total amount owed | The number the client must pay |
| Payment terms | Due date or terms (e.g., Net 30, Due on receipt) and acceptable payment methods | Reduces confusion and speeds up payment |
| Notes | Optional: payment instructions, thank-you, or legal terms | Improves clarity and professionalism |
Missing any of these can slow down payment or weaken your documentation in an audit. Use a sample invoice or invoice example as a checklist when you create or make your first invoice.
How to create your first invoice (step-by-step)
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Choose a format or tool. You can use a free invoice creator, a template (e.g., Excel, Word, or Google Docs), or our invoice generator that outputs a printable or PDF to download. For specific platforms, see Square, PayPal, QuickBooks, Shopify, or eBay. Pick one and stick with it for consistency.
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Add your and your client’s details. Include full names and addresses so the invoice is clear and usable for both bookkeeping and tax purposes.
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Assign an invoice number. Use a simple sequence (1001, 1002, …) and keep a log or use software so numbers don’t repeat. For details, see how to create an invoice number.
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List what you’re charging for. For each line item include a short description, quantity, unit price, and line total. This matches how to write an invoice and supports the amount you report as income.
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Add subtotal, tax (if any), and total. If you collect sales tax, show it separately. Apply any discounts or shipping and show the final amount due.
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State payment terms and methods. Say when payment is due (e.g., “Due on receipt” or “Net 30”) and how you accept payment (check, ACH, card, etc.). Agree on terms with the client in writing before you start work.
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Review and send. Double-check amounts and contact details, then send the invoice by email or your usual method. For more on delivery and follow-up, see how to send an invoice and send invoice online.
Payment terms and getting paid faster
Payment terms set when the client must pay. Stating them clearly on the invoice and in your agreement reduces late payments and disputes. The table below summarizes common terms; for implementation tips, see how to send an invoice.
| Term | Meaning | When to use it |
|---|---|---|
| Due on receipt | Payment due as soon as the client receives the invoice | Small jobs, one-off work, or when you need fast cash flow |
| Net 15 | Payment due within 15 days of the invoice date | Shorter cycle than Net 30; good for freelancers and small projects |
| Net 30 | Payment due within 30 days of the invoice date | Standard for B2B; many companies expect this |
| Net 45 / Net 60 | Payment due in 45 or 60 days | Use only with trusted or larger clients; can strain your cash flow |
| 50% upfront, 50% on completion | Half due before work, half when done | Common for projects; improves cash flow and commitment |
| Custom | Any other arrangement (e.g., “Due by [date]”) | When you’ve agreed on a specific date or milestone |
Best practices: Put payment terms on every invoice, list accepted payment methods, and consider a small discount for early payment (e.g., 2% if paid within 10 days) to encourage faster payment. Businesses with clear terms often get paid faster than those without.
Common payment methods: pros and cons
Listing which payment methods you accept on your invoice avoids confusion and helps clients pay quickly. The table below summarizes common options and tradeoffs so you can choose what fits your business.
| Method | Pros | Cons |
|---|---|---|
| Check | No fees; paper trail; familiar to many clients, especially older or B2B | Slow (mail + bank clearance); risk of bounce or stop-payment; manual recording |
| Bank transfer / ACH | Low or no fees; direct to your account; good for larger amounts; automatic record | Client needs your bank details; 1–3 business days to clear; some clients don’t use it |
| Credit / debit card | Fast; convenient for clients; can enable recurring billing | You pay processing fees (typically 2–3%); chargeback risk; may need a merchant account |
| PayPal | Widely used; buyer protection can reassure clients; works internationally | Fees (around 3%); holds or limits on new accounts; not ideal for very large invoices |
| Venmo | Quick for small amounts; popular for freelancers and informal work | Personal accounts not for business (ToS); fees on business transactions; less professional for B2B |
| Zelle | No fee; fast (often same-day); tied to U.S. bank account | No buyer protection; limited recourse if sent to wrong person; not all banks support it |
| Cash | No fees; immediate; no chargebacks | No automatic record; security and handling risk; harder to document for taxes |
| Wire transfer | Same-day or next-day; large amounts; international use | Fees (often $15–50); more steps for client; overkill for small invoices |
Recommendation: Offer at least one electronic option (e.g., ACH or card) plus check if your clients use it. State your preferred method and any instructions (e.g., “Pay by ACH to the account below” or “Card payments via link in email”) directly on the invoice so clients know exactly how to pay.
Sending invoices and getting paid
Send the invoice as soon as the work is done or the goods are delivered so the client can process it quickly. Email with the invoice attached (e.g., PDF) is standard; you can also use a portal or online invoicing tool that tracks when the invoice is viewed and paid.
Follow up politely if the due date passes: send a short reminder and, if needed, a second reminder with a copy of the invoice. Keep copies of all sent invoices and any payment confirmations for your records.
Tips for getting paid on time: Use a clear subject line (e.g., “Invoice #1001 from [Your Business] – Due [date]”). Confirm the client’s billing email and contact before you start the job so the invoice reaches the right person. If you work with larger companies, ask who processes invoices and whether they need a purchase order (PO) number on the invoice. Setting expectations early and sending a professional, complete invoice the first time reduces delays and back-and-forth.
Recordkeeping and tax requirements
Invoices are part of your business records. The IRS expects you to keep records that support the income and deductions on your tax return. Invoices help you report income correctly, reconcile 1099s, and substantiate revenue if you’re audited.
What to keep: Copies of every invoice you send (and ideally proof of delivery or payment). Organize them by year and type (e.g., by client or project) so you can find them later.
How long to keep records: The table below follows IRS guidance for record retention. When in doubt, keep records longer; some states and situations require it.
| Record type | Minimum retention (IRS) | Notes |
|---|---|---|
| General business records (income, expenses, invoices) | 3 years from filing date (or 2 years from tax payment, if later) | Covers most small business returns |
| Employment tax records | 4 years | W-2s, payroll, employment tax filings |
| If you omit >25% of gross income | 6 years | Longer period of limitations |
| Worthless securities / bad debt deduction | 7 years | If you claim these |
| Fraud or failure to file | Indefinitely | No period of limitations |
Source: IRS – How long should I keep records?
Your supporting documents should show who (payee/payer), how much, when, and what for. Invoices do exactly that—so treat them as permanent parts of your bookkeeping. For more, see IRS Publication 583 (Starting a Business and Keeping Records) and the IRS tax guide for small business. Many businesses keep digital copies in the cloud or in accounting software so they’re searchable and backed up; the IRS accepts electronic records as long as they are accurate and complete.
Invoice examples and templates
Using an invoice example or sample invoice speeds up creation and helps you include all required elements. We offer templates by industry and format (e.g., contractor, consulting, freelance, PDF) so you can start from a layout that fits your work and customize it.
You can create an invoice for free with our tools, then download a PDF to send to clients. For a full walkthrough, see how to create an invoice and how to make an invoice.
Related how-to guides
View all how-to guides — Browse every guide by topic (create, send, format, platform, and more).
- How to create an invoice — Step-by-step guide to creating your first invoice
- How to make an invoice — Make a professional invoice in minutes
- How to write an invoice — What to include and how to phrase it
- Create an invoice free — Free tools and templates
- How to send an invoice — Best ways to send and track invoices
- Send invoice online — Email, portals, and online delivery
- Invoice format — Standard format and layout
- Invoice example — Sample invoices you can copy
- Sample invoice — Example with all sections
- Invoicing basics — What invoicing is and how it works
- Invoice vs receipt — When to use each and the difference
By platform or format
- How to create an invoice in Excel — Build an invoice in Excel or from a spreadsheet
- How to create an invoice in Word — Create an invoice in Microsoft Word
- How to create an invoice in Google Docs — Make an invoice in Google Docs
- How to create a PDF invoice — Create and send an invoice as PDF
- How to create an invoice on Square — Create and send invoices with Square
- How to create an invoice on PayPal — Create PayPal invoices for payment
- How to create an invoice in QuickBooks — Invoicing in QuickBooks Online or Desktop
- How to create an invoice on Shopify — Invoices for Shopify stores
- How to create an invoice on eBay — Create an invoice for eBay sales
- How to create an invoice number — Numbering invoices and best practices
- How to create an invoice for freelance work — Invoicing as a freelancer or contractor
Use this page as your overview and jump to any guide above for more detail. When you’re ready, create your invoice and download it as a PDF to send to your client.
Online invoicing services
Below is a reference table of popular online invoicing services with links and typical pricing. Pricing can change; check each provider’s site for current plans and limits.
| Service | Link | Pricing range |
|---|---|---|
| FreshBooks | freshbooks.com | ~$19–$75/month; free trial |
| Invoice Maker | invoicemaker.com | ~$12–$30/month; free trial, 1 free invoice/month |
| QuickBooks Online | quickbooks.intuit.com | ~$30–$90/month; free trial |
| Zoho Invoice | zoho.com/invoice | Free (limited invoices/year); paid from ~$15/month |
| Wave | waveapps.com | Free (unlimited invoices); Pro ~$19/month |
| Xero | xero.com | ~$15–$78/month; free trial |
| Harvest | getharvest.com | Free (1 seat, 2 projects); Teams ~$12–$49/month per seat |
| Square Invoices | squareup.com/invoices | Free; payment processing 2.9% + 30¢ per card |
| PayPal Invoicing | paypal.com/invoicing | Free to create/send; 2.9%–3.49% + fixed fee per payment |
| Stripe Invoicing | stripe.com/invoicing | 0.4%–0.5% per paid invoice; payment fees separate |
| Invoice Ninja | invoiceninja.com | Free (self-hosted); cloud ~$10–$14/month |
| PandaDoc | pandadoc.com | ~$19–$49/month per seat; pay-as-you-go from ~$9 |
| Bonsai | hellobonsai.com | ~$15–$59/month (billing & invoicing in higher tiers) |
| HoneyBook | honeybook.com | ~$19–$40/month; free trial |
| Invoice2go | invoice.2go.com | Tiered by invoices/year; Premium for unlimited |
| Sage | sage.com | ~$15–$39/month (accounting plans with invoicing) |
| AND CO | and.co | Free (solo); paid plans for teams |
| Hiveage | hiveage.com | ~$16–$60/month |
| Zoho Books | zoho.com/books | Free (1 user); paid ~$15–$40/month |
| Bill.com | bill.com | Custom/enterprise; often bundled with accounting |
| Paymo | paymo.com | Free (limited); ~$15–$25/user/month |
| Plutio | plutio.com | ~$19–$49/month; includes invoicing |
| Scoro | scoro.com | ~$26–$65/user/month (project & invoicing) |
| Elorus | elorus.com | Free (1 user); paid from ~$9/month |
| InvoiceOcean | invoiceocean.com | Free tier; paid from ~$8/month |
| QuickBooks Self-Employed | quickbooks.intuit.com/self-employed | ~$20/month (tax + invoicing for solos) |
Pricing is approximate and may vary by region, user count, and plan. Check each provider’s website for current rates and limits.
Invoice templates (A–Z)
You can create an invoice from a template in three steps: (1) pick a template below that fits your industry or format (Word, PDF, Excel, etc.), (2) open it and add your business and client details, line items, and payment terms, and (3) save or download as PDF and send it to your client. Our invoice generator lets you fill in the details online and download a PDF—no template file needed. The table below lists all of our templates alphabetically by title; click any link to go to that template’s page where you can preview and download it.
When to add sales tax (by state)
If you sell taxable goods or services in a state where you have nexus (a presence or connection that triggers tax obligations), you generally must collect that state’s sales tax from the buyer and remit it to the state. The rules differ by state: some tax only tangible goods, others tax many services too, and five states have no state sales tax at all. The table below gives each state’s state-level sales tax rate and a short summary of when tax is required. Local jurisdictions in many states add their own tax on top of the state rate, so the total rate your customer pays may be higher—always confirm with your state’s revenue department or a tax professional. For a sales tax calculator by state and links to each state’s official tax agency, see our sales tax calculator and state-by-state guide.
| State | State sales tax rate | When tax is required |
|---|---|---|
| Alabama | 4% | Tangible goods and certain services (e.g., repair, installation); many professional services exempt. |
| Alaska | No state tax | No state sales tax; some localities impose local sales tax. |
| Arizona | 5.6% | Goods and selected services (e.g., utilities, telecom, some repair); check state list. |
| Arkansas | 6.5% | Goods and many services (repair, installation, cleaning, etc.); broad service tax. |
| California | 7.25% | Goods and some services (e.g., repair, installation); most professional services exempt. |
| Colorado | 2.9% | Goods and limited services; many services exempt. |
| Connecticut | 6.35% | Goods and enumerated services (e.g., repair, storage, some personal services). |
| Delaware | No state tax | No state sales tax. |
| District of Columbia | 6% | Goods and many services (e.g., repair, cleaning, storage). |
| Florida | 6% | Goods and certain services (e.g., repair, cleaning, some admissions). |
| Georgia | 4% | Goods and specified services; many professional services exempt. |
| Hawaii | 4% | Goods and most services (general excise tax); broad—check exemptions. |
| Idaho | 6% | Goods and some services (e.g., repair, installation, lodging). |
| Illinois | 6.25% | Goods and selected services (e.g., repair, laundry, some amusements). |
| Indiana | 7% | Goods and a few services (e.g., utilities, some admissions). |
| Iowa | 6% | Goods and enumerated services (e.g., repair, installation, storage). |
| Kansas | 6.5% | Goods and many services (repair, installation, etc.); relatively broad. |
| Kentucky | 6% | Goods and specified services (e.g., repair, installation, utilities). |
| Louisiana | 4.45% | Goods and most services; one of the broadest—check state list. |
| Maine | 5.5% | Goods and limited services (e.g., repair, some utilities). |
| Maryland | 6% | Goods and certain services (e.g., repair, cleaning, storage). |
| Massachusetts | 6.25% | Goods and enumerated services (e.g., repair, telecommunications). |
| Michigan | 6% | Goods and specified services (e.g., repair, installation, some utilities). |
| Minnesota | 6.875% | Goods and selected services (e.g., repair, installation, lodging). |
| Mississippi | 7% | Goods and many services (repair, installation, etc.); check state rules. |
| Missouri | 4.225% | Goods and a limited set of services. |
| Montana | No state tax | No state sales tax. |
| Nebraska | 5.5% | Goods and enumerated services (e.g., repair, installation, some utilities). |
| Nevada | 6.85% | Goods and certain services (e.g., repair, installation, some amusements). |
| New Hampshire | No state tax | No state sales tax. |
| New Jersey | 6.625% | Goods and limited services (e.g., repair, installation, storage). |
| New Mexico | 5.125% | Goods and most services (gross receipts tax); broad—check exemptions. |
| New York | 4% | Goods and enumerated services (e.g., repair, utilities, some personal services). |
| North Carolina | 3% | Goods and specified services (e.g., repair, installation, some utilities). |
| North Dakota | 5% | Goods and certain services (e.g., repair, installation, lodging). |
| Ohio | 5.75% | Goods and selected services (e.g., repair, storage, some utilities). |
| Oklahoma | 4.5% | Goods and enumerated services (e.g., repair, installation, utilities). |
| Oregon | No state tax | No state sales tax. |
| Pennsylvania | 6% | Goods and limited services (e.g., some repair, utilities). |
| Rhode Island | 7% | Goods and specified services (e.g., repair, installation, utilities). |
| South Carolina | 6% | Goods and certain services (e.g., repair, utilities, some admissions). |
| South Dakota | 4.5% | Goods and most services; broad—check state list and exemptions. |
| Tennessee | 7% | Goods and many services (repair, installation, etc.); check state rules. |
| Texas | 6.25% | Goods and enumerated services (e.g., repair, amusement, some labor). |
| Utah | 6.1% | Goods and many services; check state list. |
| Vermont | 6% | Goods and limited services (e.g., repair, utilities, lodging). |
| Virginia | 5.3% | Goods and certain services (e.g., repair, installation, some utilities). |
| Washington | 6.5% | Goods and many services (B&O plus retail sales tax); broad. |
| West Virginia | 6% | Goods and most services; broad—check exemptions. |
| Wisconsin | 5% | Goods and enumerated services (e.g., repair, installation, some utilities). |
| Wyoming | 4% | Goods and limited services (e.g., repair, lodging, some utilities). |
Notes: (1) You must have nexus in a state before you are required to collect that state’s tax (physical presence, economic nexus, or other rules). (2) Rates and rules change; verify with your state revenue department or a tax advisor. (3) Local rates often apply on top of the state rate—total tax can be higher than the state rate shown.